Home Sales, PMI, Demographics redux, Gallstones, Airlines, and the Year of the Snake.
Economic Conversation Starters
The week's big news: Home sales have hit the lowest level since 1995.
We bought our house in 1994.
The last time things were this slow, you could get a screaming deal on a house. Not this time.
Last year, some areas hit record prices. The popular areas are still popular areas.
With rates between 6% and 8%, it’s still the same old story: sellers are unwilling to sell and buy a home at a higher rate. That limits supply. Ergo, this is a supply-driven slowdown.
FYI, last week's average 30-year fixed rate was 6.96% on a conforming loan.
In 1994, the average fixed rate was 8.38%.
In another bit of economic news, the U.S Manufacturing Purchasing Managers Index – PMI - nudged above 50.1, against expectations of 49.7.
The PMI is an indicator of the prevailing direction of economic trends in the manufacturing sector. Anything over 50 means more purchasing managers are more positive about the future than negative.
And that’s good news.
Remember I mentioned Demographics? It’s baaaack….
The latest study on the population of the USA is out, and the news is not good.
Instead of more people dying than being born happening in 2050, it starts in 2033.
Correct. Deaths will outnumber births in 2033.
Because of immigration, the population will keep growing until about 2055, when it will peak.
Well, that takes care of the human carbon footprint and the housing shortage.
One last thing. To replace the population, you need a birthrate of 2.1x per woman. The US is down to 1.6x as of 2023.
In a related story, remember the $80,000,000,000,000 in wealth the Boomers have? There’s a bit of a twist. Statistically, women outlive men, and the Boomers are no exception.
Once the man dies – frequently the head of household – 70% of the surviving spouses change financial advisors.
As of 2023, women boomers control $8 trillion. I think that’s going to grow.
A BofA study found that in a relationship, the woman makes or influences 85% of charitable giving arrangements.
So, if you are involved in a non-profit, and you are seeking funds from money that is held jointly, and you are talking to the man of the house, you’re talking to the wrong person.
Gallstones. Cattle gallstones to be specific.
What are gallstones doing in a newsletter that can only be charitably described as financial in nature?
Well, cattle gallstones are one of the most prized ingredients in Chinese medicine. How prized?
How about $5,800 an ounce prized.
On average, it’s only between $1800 to $4000 an ounce, depending on quality.
Just as a basis of comparison, Friday’s gold price was $2,771 an ounce.
Instead of mining it out of the ground, the gallstones are found in slaughterhouses.
And are being stolen in the dead of night.
Just another conversation starter from The Russell Report.
Let’s Talk Airlines
The airline with the top overall ranking is Delta, followed closely by Southwest. Who knew?
Not surprisingly, Frontier was last, with Spirit close behind.
Involuntary bumping:
It turns out that if you take a voucher or accept cash in lieu of your seat, you are not involuntary bumped.
Delta only had 1 (one) passenger involuntarily bumped last year, down from 3 in 2023.
Guess how many American had?
13,200. I blame it on the weather at DFW and not giving enough incentive to “take the next available flight.”
United had the second highest on-time arrivals. First? Delta.
Worst baggage handling? American. I guess when you bump 13,200 people, you better get their bags off the plane.
Best baggage handling? Allegiant.
Fewest extreme delays? Alaska, with only 8% of flights delayed 45 minutes or more. Frontier was the worst.
Southwest had the fewest canceled flights and the fewest 2-hour tarmac delays.
The Year of the Snake
The Lunar New Year begins this Wednesday. This is significant for me because, as some of you may know, at the age of 6, I moved to Korea, then Okinawa, then Hong Kong, and finally, Taiwan, before returning to California to go to college. So what?, you say.
In Chinese culture, children get little red envelopes with money at this time of year.
You bet that made an impact on me!
It’s also the time of year that virtually all businesses close in China, as well as Viet Nam, where the Lunar New Year is also celebrated.
So if your supplier is not returning emails, you know why.
You are a Snake if you were born in 1941, ‘53, ‘65, ‘77, ‘89, ‘01, and 2013.
People born in the year of the snake are supposedly wise, charming, and intuitive but prone to procrastination and stinginess.
As a Snake, this is the year to make responsible decisions and moving away from old habits that no longer serve you well. Symbolically, you are shedding your old skin and moving forward into the new year.
OK, folks, we are through 1/12th of the year. I trust you have hit 1/12th of your goals. If not, perhaps you should shed your old skin of habits and move forward into the new year without procrastination.
Have a good week!
